Explainer: Everything’s Bigger in Texas…

There have been lots of questions about the story the LATimes ran today on the size of Texas’ deficit and whether or not it’s possible to compare California’s budget shortfall to Texas’.

Many readers have pointed out — on Twitter and in other forums — that California’s has an annual budget cycle as opposed to Texas’ biennial budget cycle, so California’s $25 billion shortfall is for this year alone. Texas’ budget shortfall, which ranges between $15-27 billion depending on who you talk to, is for a two year budget cycle. If you break that down for each year, Texas budget shortfall is $7.5-$13.5 billion.

While Texas has a smaller absolute budget shortfall than California does, proportionately the budget deficits are about the same size. California’s annual budget spends more than $100 billion per year while Texas spent only $87 billion over the last two years combined. To provide the same level of services to Texas’ growing population, the state would have to spend about $99 billion over the next two years; less than half of what California spends annually (the 2010 budget spent more than $126 billion).

If Texas weren’t to increase spending, the shortfall in revenue would consume about 17 percent of the state’s budget. If the state were to increase spending to keep up with the growth in population, the shortfall would consume more than 27 percent of the budget. California’s budget gap amounts about 20 percent of its spending. Thus, it is accurate to conclude that Texas and California have budget shortfalls that are proportionately the same size.